From CNBC:

As tensions between the US and China increase and regulations tighten, venture capitalists in China are under pressure to change their strategy. First, they must shift from raising US dollars to Chinese yuan. This is due to decreasing investor sentiment, with the share of US dollars in total venture capital funds dropping to 5.3% in 2023.

Furthermore, China-based VC funds face challenges related to Washington’s scrutiny and Beijing’s regulations, including the requirement for Chinese companies to receive approval before listing in the US or Hong Kong. Some VC’s have separated their China operations from those in the US under new names.

Finally, Chinese authorities have shifted their focus from consumer-facing sectors to areas like high-end manufacturing and renewable energy. This shift aligns with the development priorities of the Chinese government. The shift away from internet apps towards hard tech requires more capital, leading to larger deal sizes and a more state-concentrated venture capital scene.



Read more: China’s VC playbook is changing as U.S. IPO exits get tougher